This story was updated at 5:45 p.m. March 15, 2022, to include more comments and correct a reference to an affordable housing fund. It was updated again at 9:05 p.m. to include more information.
Montgomery County Executive Marc Elrich on Tuesday proposed a $6.3 billion county operating budget for next year, up $300 million from this year, and with no increase in the property tax rate.
His administration said the budget focuses on affordable housing, climate change issues and increasing police salaries, among other areas.
Elrich’s budget is his last one during his first term, as he runs for re-election this year.
It keeps the weighted average property tax at 97.95 cents per $100 of assessed value, and the income tax offset credit — provided against the county’s real property tax rate to offset increases of more than 2.6% of the county income tax revenues — at $692. Both would be at the same rate as in this year’s budget.
During a news briefing on Tuesday, Elrich called the budget plan his best one during his time as county executive. However, he said, revenue shortfalls and the coronavirus pandemic prevented him from funding all of the social programs and initiatives that he wanted to.
He recalled, in his first year, being told in his first week in office that he would have to cut tens of millions of dollars due to revenue shortfalls. He pored over many documents to determine where to cut, he said.
“As someone who really believes in the social programs and the things this county does, that was a hard thing to do,” Elrich said.
The overall operating budget proposed for next year represents roughly a 5% increase from this year’s budget.
The could also has a capital improvements program budget for fiscal years 2023 to 2028, proposed at about $5.1 billion.
Chief Administrative Officer Rich Madaleno said on Monday that the budget funds 99% of what Montgomery County Public Schools Interim Superintendent Monifa McKnight and the county Board of Education requested. The school district requested $2.96 billion from the county. The budget funds the district at $2.93 billion.
It funds MCPS at $117.4 million over the State’s maintenance of effort requirement, the legally required minimum.
Madaleno said part of the reason for not funding the full amount is the school system believes its health insurance costs will rise $30 million because of medical procedures employees postponed from the past two years. Actuaries for the county and MCPS have different projections on those costs, he said.
A Montgomery County Public Schools spokesman did not respond to multiple requests for comment.
County Council Gabe Albornoz said in an interview that at a quick glance, he was pleased to see several social safety net programs included in the budget, as he is the chair of the council’s Health and Human Services committee.
He added, however, that he wants to make sure there is funding for those programs and initiatives after the current year.
“I think there’s a lot of new programs and initiatives, or an expansion of programs and initiatives … which, given where we are as a community, are warranted,” Albornoz said. “But as we dig into the budget, I just want to make sure they are fiscally sustainable.”
In a news release, Albornoz encouraged residents to provide feedback on the budget as the review process begins.
“Montgomery County’s operating budget is our most significant policy document and one of the best tools to fund pivotal and essential services to improve the quality of life for County residents,” Albornoz wrote. “The FY 23 Recommended Operating Budget provides the Council with a blueprint for us to begin our work.”
The budget proposal also includes $3.3 million for Montgomery College to establish an East County Education Center. In an interview, Jermaine Williams, the president of the college, highlighted that funding.
He said the project would start as a center, then increase in size to be another campus. It would serve one of the college’s missions in ensuring equity in education, he added.
The budget includes roughly $140 million for affordable housing projects and initiatives. That includes $40 million of one-time funding for a “naturally occurring affordable housing” fund. Madaleno said that funding is possible because of higher than expected revenues.
The fund, Madaleno said, is meant to prevent rental hikes in areas prone to increasing rents, such as along the future Purple Line light rail and other transit corridors.
Aseem Nigam, the director of the county’s Department of Housing and Community Affairs, said in an interview he hopes that fund can preserve at least a few thousand units, particularly in those transit corridors. He said the county is anticipated to lose 7,000 to 11,000 units of “naturally occurring affordable housing” because of market pressures and other factors.
He hopes the fund can be continued in future years, but that depends on future revenue and funding sources.
“We are of the opinion that this kind of fund, by itself, will send a signal to the development community that we are serious about affordable housing,” Nigam said.
This year’s budget also marks the first time that the county will surpass the 10% mark for its reserves. Madaleno said the county set 10% as its standard in 2010. Previously, it was around 5%, he said.
The budget also proposes an increase in police officer salaries by roughly 10%, making them more competitive with other jurisdictions around the region, Madaleno said. Roughly $8 million is allocated to pay for that, he said.
Elrich and the Fraternal Order of Police Lodge 35 — the county’s police union — negotiated that deal. The union said in a statement earlier this month that the increase in salaries “is a step in the right direction.”
Lee Holland, the president of that union, could not immediately be reached for comment via a phone call and a text message on Tuesday.
The budget also includes funds for two sworn positions to help with random review of police body-cam footage, and three civilian positions to help process Public Information Act requests.
Two climate initiatives funded in the budget proposal are due to legislation — one bill passed by the County Council and one still in the legislative pipeline.
About $18.6 million would go to the county’s Green Bank to help with capital projects to make buildings more environmentally friendly. That money comes from the county’s energy use tax, as outlined in a bill the County Council passed allocating at least 10% of that tax to the Green Bank.
The budget also allocates $1 million to start implementing aspects of the building energy performance standards bill, which the council is considering. That bill is meant to set standards for several types of buildings countywide, to make them more environmentally friendly.
The operating and capital budget will have multiple public hearings and council work sessions in the coming weeks. The County Council can add or subtract from any line item in the budget and must act on it by June 1, according to the county charter.
The council must approve any tax levies, if necessary to finance the budget, by June 30, according to the charter.
Steve Bohnel can be reached at firstname.lastname@example.org